Bramblewood Garden Centers: Turnaround Case Study with Answer
Why did a 30-store garden center chain swing from profit to a large loss, and what should it do in the next 12 months to satisfy its lender? A free medium turnaround case study with 6 questions, 3 exhibits and a model answer for every question. About 30 minutes. No login to read.
The live case is a different client with its own data, so you practice without knowing the answers. The client and every number on this page are made up for practice.
Retail / Garden centers · Interviewer-led · McKinsey style
New to turnaround cases? Learn the method first: Turnaround Case Interview Example: Runway Math and Answer.
The case
Our client, Bramblewood Garden Centers, is a UK chain of 30 garden centers. It made a profit of £2.4 million on £150 million of revenue in FY2023 but lost £9.6 million on £144 million in FY2025. Its lender wants a 12-month turnaround plan, so what drove the swing and what should the chain do first?
Bramblewood sells plants and trees, garden furniture and barbecues, pet and wild bird supplies, Christmas trees and gifts, and runs a café in every store. All 30 stores are large out-of-town sites on leases, and the chain has not opened or closed a store since FY2023.
Revenue fell 4% while costs kept rising. A wet spring left plants unsold, and wages, rent reviews and energy bills all went up. The CEO believes the weather is the main cause and that sales will bounce back. The CFO believes the cost base is too high for the chain's size and that a handful of stores lose money in any weather. The lender has agreed to look at a plan before it decides whether to tighten the terms of its £20 million facility.
Interviewer's data, shared if asked
- Store count was 30 in both FY2023 and FY2025; no openings or closures.
- March to June brings about 45% of annual revenue, yet staff hours are rostered almost evenly across the year.
- Cash is £5.0 million and £6.0 million of the £20 million facility is undrawn, so liquidity is £11.0 million. The lender's covenant requires liquidity to stay above £4.0 million.
- Maintenance capex is £2.4 million a year. Safety and legal needs account for £1.0 million of it; the rest can wait a year.
- Plant write-offs and markdowns were 11% of plant purchases in FY2025 against 6% in FY2023, after a wet spring left stock unsold.
- Hourly pay is up about 6% since FY2023 under national minimum wage rises, and opening hours have not changed.
Question 1 · Structure
How would you structure your approach to explain the swing from profit to loss and to build a 12-month turnaround plan?
Hint: A turnaround has two jobs: diagnose what changed, then sequence the fixes. Put cash first, then the core, then growth.
Model answer
I would split the work into a diagnosis and a plan. The diagnosis asks which part of the swing came from revenue and gross margin and which from costs, and then which categories and which stores are behind it. The plan runs in three phases: stop the bleeding, fix the core, then grow.
Because the lender is the deadline, I would start with cash: how long liquidity lasts at the current burn and what the covenant allows. That tells us how fast the first phase has to move.
- Diagnose, revenue and margin: revenue by category (plants, furniture, Christmas, pet, café) as volume times price, and gross margin including wastage and markdowns.
- Diagnose, costs: labor, rent, energy and head office, each against revenue, to see which are fixed and which can flex with the season.
- Diagnose, stores: profit by store or segment, to separate chain-wide problems from a few weak sites.
- Stop the bleeding: cash runway, covenant, capex freeze, quick cost cuts, closure of stores that lose money in any weather.
- Fix the core: plant buying and markdown discipline, seasonal rostering, rent resets, energy contracts.
- Grow: only after the first two phases, for example expanding the café where margins are high.
What the interviewer is looking for
- Good: a diagnosis plus a plan, with the stop the bleeding, fix the core and grow phases named.
- Strong: tailors the tree to a garden center (seasonality, plants as perishable stock, store leases) instead of a generic profitability tree.
- Excellent: starts from cash runway and the lender's deadline, and tests the CEO's weather theory against the CFO's cost theory.
Push-back: The CEO says it was only the weather. How would you test that before you spend time on costs?
Question 2 · Exhibit
Using Exhibits A and B, what drove the swing from profit to loss, and how much of it can the weather explain?
| Line | FY2023 (£M) | FY2025 (£M) |
|---|---|---|
| Revenue | 150.0 | 144.0 |
| Cost of goods sold | 83.1 | 83.2 |
| Store labor | 33.0 | 35.0 |
| Rent and occupancy | 19.5 | 21.0 |
| Energy and other store costs | 7.5 | 9.5 |
| Head-office overhead | 4.5 | 4.9 |
| Operating profit | 2.4 | -9.6 |
£ millions. Operating profit = revenue minus all lines above it.
| Category | FY2023 revenue (£M) | FY2025 revenue (£M) | FY2023 gross margin | FY2025 gross margin |
|---|---|---|---|---|
| Plants and trees | 54 | 46 | 50% | 45% |
| Garden furniture and barbecues | 36 | 33 | 35% | 30% |
| Christmas and gifts | 18 | 17 | 40% | 40% |
| Pet and wild bird | 24 | 26 | 35% | 35% |
| Café | 18 | 22 | 65% | 65% |
| Total | 150 | 144 | 44.6% | 42.2% |
Gross margin = (revenue minus cost of goods sold) / revenue.
Hint: Split the swing into gross profit and the costs below it, then take the largest category apart into a volume effect and a margin effect.
Model answer
Operating profit went from +£2.4 million to -£9.6 million, a swing of £12.0 million. It splits almost evenly: gross profit fell £6.1 million (£66.9 million to £60.8 million) and the costs below gross profit rose £5.9 million (£64.5 million to £70.4 million) even though revenue fell 4%.
On gross profit, plants are the story. They lost £6.3 million: £4.0 million from selling £8.0 million less at a 50% margin, and a further £2.3 million because the plant margin dropped from 50% to 45% on the remaining sales, which matches the rise in write-offs and markdowns from 6% to 11% of purchases. Furniture lost £2.7 million. The café (+£2.6 million) and pet (+£0.7 million) cushioned the fall.
On costs, labor rose £2.0 million (+6.1%) in line with pay, but hours did not flex with lower sales. Energy and other store costs rose £2.0 million (+26.7%), rent £1.5 million and head office £0.4 million.
The weather can plausibly explain the plant volume loss of £4.0 million, about a third of the swing. The other two thirds, £8.0 million, is cost growth, plant wastage and weaker furniture economics, and none of that bounces back with a dry spring.
| Driver | Change in profit (£M) |
|---|---|
| Plants and trees gross profit | -6.3 |
| Garden furniture and barbecues gross profit | -2.7 |
| Christmas and gifts gross profit | -0.4 |
| Pet and wild bird gross profit | +0.7 |
| Café gross profit | +2.6 |
| Store labor | -2.0 |
| Rent and occupancy | -1.5 |
| Energy and other store costs | -2.0 |
| Head-office overhead | -0.4 |
| Total swing | -12.0 |
What the interviewer is looking for
- Good: computes the £12.0 million swing and splits it into gross profit and costs.
- Strong: takes plants apart into volume and margin, and links the margin drop to wastage and markdowns.
- Excellent: answers the weather question with a number (about a third) and says the other two thirds will not fix themselves.
Push-back: Plants and furniture both fell. Why do you call the plant volume the only weather effect?
Question 3 · Math
Management has four ideas to lift profit. Size the annual profit impact of each using Exhibits A and B, and tell me which two matter most.
Interviewer's data, shared if asked
- Plants: buy closer to demand and mark down earlier to win back 3 of the 5 lost margin points on plants.
- Labor: roster by season, trimming January, February and September hours while protecting March to June, for 6% fewer paid hours a year.
- Energy and other store costs: a new energy contract and waste cuts to lower the line by 8%.
- Head office: a restructure to cut 10% of head-office cost.
- All four are cash savings and take effect at full run-rate.
Hint: Multiply each assumption by the right FY2025 base: plant revenue for margin points, and the cost lines for the percentage cuts.
Model answer
Plants: 3 points on £46.0 million of plant revenue is £1.38 million. Labor: 6% of £35.0 million is £2.10 million. Energy and other store costs: 8% of £9.5 million is £0.76 million. Head office: 10% of £4.9 million is £0.49 million. Together that is £4.73 million a year.
Labor and plants matter most: they add up to £3.48 million, about three quarters of the total. But all four ideas together cover only about half of the £9.6 million loss, so cost tweaks across the chain are not enough on their own. The rest has to come from the store estate.
| Lever | Base (£M) | Assumption | Annual impact (£M) |
|---|---|---|---|
| Plant margin recovery | 46.0 revenue | +3 points | 1.38 |
| Seasonal rostering | 35.0 labor | -6% | 2.10 |
| Energy and other store costs | 9.5 | -8% | 0.76 |
| Head-office restructure | 4.9 | -10% | 0.49 |
| Total | 4.73 |
What the interviewer is looking for
- Good: applies each assumption to the right base and adds the four correctly to about £4.7 million.
- Strong: ranks by size and notes that the four levers close only about half of the loss.
- Excellent: says that some of these savings sit in stores that may close, so they must be netted against the store decision.
Push-back: Cutting 6% of labor hours sounds easy on paper. How do you stop it hurting sales from March to June?
Question 4 · Exhibit
Look at Exhibit C. Which stores would you close, which would you fix, and which would you keep? Size what closing the weakest ones is worth.
| Segment | Stores | Revenue (£M) | Store profit (£M) | Rent (£M) |
|---|---|---|---|---|
| A: stronger stores | 14 | 72 | 2.8 | 11 |
| B: marginal stores | 10 | 44 | -1.5 | 6 |
| C: weakest stores | 6 | 28 | -6.0 | 4 |
| Total | 30 | 144 | -4.7 | 21 |
Store profit is after all store costs, including rent, and before head-office overhead.
Interviewer's data, shared if asked
- Closing the six segment C stores costs £3.6 million one-off, for lease exit payments and redundancy.
- About £1.0 million of the segment C costs would stay after closure, because they are shared logistics and distribution.
- Landlords of the ten segment B stores have said they would cut rent 10% in return for a five-year lease extension.
- Assume the chain-wide levers from the previous question are shared across stores in proportion to revenue, and that 20% of the store-level levers sit in the six stores that close.
Hint: Compute store profit as a share of revenue per segment, then ask for each one: is the loss fixable with the levers already on the table, or structural?
Model answer
Segment A (14 stores) earns 3.9% on £72.0 million: keep and protect. Segment B (10 stores) loses 3.4%, a £1.5 million loss: fix. Segment C (6 stores) loses 21.4%, a £6.0 million loss on £28.0 million: close. The stores add up to a £4.7 million loss before head office, and the £4.9 million of head office takes it to the £9.6 million total.
Closing segment C saves £6.0 million of store losses less £1.0 million of costs that stay, so a net £5.0 million a year. The one-off cost is £3.6 million, which pays back in about 8.6 months. Segment C stores are also smaller (£4.7 million of revenue each, against £5.1 million for segment A), so a fix would have to be a bigger jump than the levers can deliver.
Segment B can fix itself. Its share of the chain-wide store levers is about £1.3 million (44/144 of £4.24 million), and the landlords' 10% rent cut adds £0.6 million. That is £1.9 million against a £1.5 million loss, so segment B moves to a profit of about £0.4 million.
| Segment | Stores | Store margin | Decision | Annual effect (£M) |
|---|---|---|---|---|
| A: stronger stores | 14 | 3.9% | Keep and protect | n/a |
| B: marginal stores | 10 | -3.4% | Fix: levers plus 10% rent cut | +1.9 |
| C: weakest stores | 6 | -21.4% | Close | +5.0 |
What the interviewer is looking for
- Good: segments the estate by store margin and picks the six weakest stores to close.
- Strong: nets the saving for stranded costs and computes the payback on the closure cost.
- Excellent: shows that segment B can reach profit with the chain-wide levers and the rent cut, which is why it is a fix and not a close.
Push-back: Some of those six stores might be the only Bramblewood in their town. Does that change your decision?
Question 5 · Judgment
What are the biggest risks to this plan? Cover the lender, the staff and the seasonality of the business.
Hint: Compare the time it takes savings to arrive with the time it takes liquidity to run out, then say what you would ask the lender for.
Model answer
The lender is the first risk and the most urgent. Current burn is about £12.0 million a year: the £9.6 million loss plus £2.4 million of maintenance capex. Liquidity of £11.0 million is £7.0 million above the £4.0 million covenant, which is seven months of burn. The savings take longer than that to arrive, and closures cost £3.6 million up front.
If the plan captures about 60% of its £9.5 million run-rate in year one (£5.7 million), pays the £3.6 million closure cost and freezes £1.4 million of non-essential capex, burn in year one is about £8.5 million and liquidity ends near £2.5 million. That is still below the £4.0 million covenant, so I would go to the lender now with the plan, ask for the minimum liquidity covenant to be reset to £2.0 million for 12 months, and offer monthly cash reporting in return.
Staff is the second risk. Six closures can unsettle the 24 stores that stay, and the plant specialists we need in spring are the ones who can leave first. I would announce the full list at once rather than in waves, offer transfers into nearby stores, and protect March to June staffing.
Seasonality is the third. March to June holds 45% of revenue in four months, about 1.35 times the average month, so the labor saving must come from the quiet months and not from the peak. Closures should happen right after Christmas trading, before spring plant stock is bought for stores that will not be open to sell it.
What the interviewer is looking for
- Good: names the lender, staff and seasonality risks and gives a mitigation for each.
- Strong: compares runway with the speed of savings and identifies the covenant problem with numbers.
- Excellent: shows that even a good plan ends the year below the covenant and proposes a specific ask to the lender in exchange for reporting.
Push-back: The lender says no to a covenant reset. What is your plan B?
Question 6 · Synthesis
The CEO and the lender are waiting. Give me your recommendation and a 12-month plan in 60 seconds.
Hint: Answer first, then the size of the swing, the levers with numbers, the phasing, and the one thing you need from the lender.
Model answer
I recommend closing the six weakest stores, fixing the other 24 with seasonal rostering, less plant waste, lower energy costs and rent resets, and agreeing a covenant reset with the lender now. Together these are worth about £9.5 million a year, which takes Bramblewood from a £9.6 million loss to roughly break-even at run-rate by month 12.
The loss came from a £12.0 million swing: gross profit down £6.1 million, led by plants, and costs below gross profit up £5.9 million. Only about a third of that is weather. The six segment C stores lose £6.0 million, and closing them saves a net £5.0 million for £3.6 million one-off, a payback of under nine months.
Months 1 to 3, stop the bleeding: lender conversation and covenant reset to £2.0 million, capex frozen to safety items (£1.4 million), head-office restructure, new energy contract, and the closure list announced so no spring stock is bought for those stores. Months 4 to 9, fix the core: close the six stores, roll out seasonal rosters, apply plant buying and earlier markdown rules, and sign rent cuts on ten stores. Months 10 to 12, grow: pilot a café upgrade in a few segment A stores, which is upside not included in these numbers.
Risks are liquidity ending near £2.5 million, which is why the lender ask comes first, and staff attrition around the closures. I would report monthly against the plan.
| Lever | Run-rate value (£M) |
|---|---|
| Close six segment C stores (net of stranded cost) | 5.0 |
| Seasonal rostering (after closures) | 1.68 |
| Plant buying and markdowns (after closures) | 1.10 |
| Energy and other store costs (after closures) | 0.61 |
| Head-office restructure | 0.49 |
| Rent cut on ten segment B stores | 0.60 |
| Total | 9.48 |
What the interviewer is looking for
- Good: leads with a clear recommendation and covers closures, cost levers and the lender.
- Strong: quantifies the plan at about £9.5 million against the £9.6 million loss and phases it over 12 months.
- Excellent: names the lender ask, the closure timing and what would change the plan, such as a smaller covenant reset.
Push-back: You say break-even. What would you tell the lender if only half the savings arrive?
Model recommendation
Show the recommendation
Close the six weakest stores, fix the other 24, and agree a covenant reset with the lender now. Together these are worth about £9.5 million a year, enough to take Bramblewood from a £9.6 million loss to roughly break-even at run-rate by month 12.
The £12.0 million swing came from £6.1 million lower gross profit, led by plants, and £5.9 million higher costs on lower sales. Only about a third of it, the £4.0 million of lost plant volume, can be blamed on the weather.
The six segment C stores lose £6.0 million a year; closing them saves a net £5.0 million for a £3.6 million one-off cost. Seasonal rostering, less plant waste, lower energy costs and a head-office cut add about £3.9 million after overlap, and a 10% rent cut on ten marginal stores adds £0.6 million.
Liquidity of £11.0 million reaches the £4.0 million covenant in seven months and still ends the year near £2.5 million with the plan, so ask the lender to reset the covenant to £2.0 million, freeze £1.4 million of capex, close the stores right after Christmas, and protect March to June staffing.
Written by Road to Offer. Updated November 7, 2026. Every client and number in this case is made up for practice.